A firm has a $5 preferred stock selling for $62.5 a share. If the firm decides to raise additional funds by issuing new preferred stocks at a $100 face value, the flotation costs will be around 3% of the new issue. The component cost of new preferred stocks is therefore:

A. 7.79 percent

B. 8.14 percent

C. 8.19 percent

D. 8.25 percent

E. 8.92 percent